Have you tried the corporate letting market?

Discussion in 'Corporate Lets' started by nmb, Feb 16, 2016.

  1. nmb

    nmb Well-Known Member

    There is potentially big money to be made in the corporate letting market with many large employers in the UK moving their staff across various parts of the country as and when required. This has increased the requirement for short-term letting arrangements so that large corporations avoid taking on the undue expense of acquiring property or long term leasing arrangements and the associated costs.

    Unlike the holiday let market, putting aside holiday periods such as Christmas, the corporate letting market should be more active throughout the year. Do you have any experience of the corporate letting market? What kind of yields are you able to demand on short-term lets?
     
  2. KGeeson

    KGeeson Property Forum Staff Forum Partner

    I actually came across a deal advertising corporate let investments today and it said they had 100% occupancy. Quite a claim! How would you go about doing Due Diligence on a company rather than an individual though (as you would a 'normal' tenant)? On the surface it seems far more financially secure (if the company is a big player) but i wonder what the 'catch' / biggest risks are...

    I'd be very interested to hear if anyone has invested in a corporate let?
     
  3. nmb

    nmb Well-Known Member

    I would be very cautious of an advert suggesting 100% occupancy – even if they could do this you have to ask yourself what kind of rental concessions they would need to offer? Checking the credentials and reliability of a company should be far easier than checking out an individual but you still need to get the money from them asap to help your own cash flow.
     
  4. Gareth Bain

    Gareth Bain Member Forum Partner

    It is very difficult to claim 100% occupancy so I would take that with a pinch of salt. The average for the UK is 70% with London reaching around 80%. Obviously, this is based on a yearly average. Corporate lets can be very seasonal as well.

    I would make sure that you do your due diligence before getting involved with a corporate let. They might achieve 100% occupancy by their rate could be really low.
     
  5. realdeals

    realdeals Active Member

    I read some good advice - base your financial forecasts on occupancy rates of 10 months out of every 12.
     
  6. Josh Caldwell

    Josh Caldwell Josh Caldwell - American Real Estate Investor

    What we call Temporary Corporate Housing in the US, is very lucrative. The company guarantees the rent and because they need to sign non standard lease terms, they will pay well above market rent. This makes any property that wouldn't normally make sense into a cash cow. I have a rental deal with Westinghouse Corp where I rent to foreign interns, and I have a deal with a local hospital for medical residents. both of these deals are well above market rent and I have zero vacancies. On top of that I get really good renters.
     
  7. Longterminvestor

    Longterminvestor Active Member

    That sounds like two very good arrangements which will bring in significant income in the short, medium and longer term. What standard of properties do you make available to the interns and medical residents?
     
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